Land tenure and farm management efficiency

the case of smallholder rubber production in customary land areas of Sumatra

This study attempts to identify the impacts of land tenure institutions on the efficiency of farm management based on a case study of smallholder
rubber production in customary land areas of Sumatra. Our study site is a typical rubber-growing village in Rantau Pandan Subdistrict in Jambi Province, Sumatra. Almost all inhabitants belong to the Melayu Jambi ethnic group, which traditionally has practiced matrilineal descent.

Farming households typically cultivate lowland wet rice, upland rice
fields, and upland rubber agroforestry plots. The rubber farming system in this area is sometimes called “jungle rubber” because wild woody species also are allowed to grow among the rubber trees, which may help protect the rubber from grass weeds. Plant biodiversity under jungle
rubber is quite high, between half to two-thirds that of natural forests. The production technologies have changed little since rubber was introduced a century ago, despite the availability of seemingly profitable alternative technologies.

In this area, farmers also have bush-fallow areas, which are generally located far away from village centers and which were planted to food crops in the distant past. At present, some of them are secondary forests. Changing land tenure institutions. In our study site, the
matrilineal system of inheritance has traditionally been practiced. This system is still followed for the inheritance of lowland paddy and upland food crop fields. However, it has been replaced by a patrilineal system of inheritance for rubber fields, in which land is bequeathed within a nuclear family from a father to his sons. Sales of upland fields have
also become common. Strong land rights are also conferred upon newly-cleared forestland, even though the land rights may decline if the cleared land is used for food production and then left fallow under traditional shifting cultivation.

Comparing rubber and upland rice. Labor, particularly family labor, is the main cost of rubber production. Labor requirements differ between rubber and upland rice. Labor by men predominates in most rubber production activities—especially forest clearing. In contrast, women provide most of the labor for upland rice. This may explain, at least partly, why the matrilineal inheritance has gradually been replaced for rubber plots by the patrilineal system, thereby providing incentives to the males who do much of the work on these plots. Rubber production is also highly labor-intensive. Although labor use per cultivated hectare
is higher for upland rice than for rubber, because of the long fallow period of upland rice, the rubber production system has a higher average labor intensity.

To assess the scarcity value of land, we compare the profitability of rubber to that of upland rice, the main alternative to rubber production. Despite large inputs of family labor, the profitability of upland rice production is very low. The residual profit per hectare of upland rice—defined as gross revenue minus costs of labor and current inputs— is positive but far smaller than the profit from mature rubber trees. The shortening of fallow periods because of increasing population pressure and limited access to new forestland has also decreased the profitability
of upland rice. The higher profitability of planting rubber explains why upland rice-bush fallow fields are being converted to rubber.

Suyanto, S.
Tomich, Thomas P.
Otsuka, Keijiro
Published date: 
International Food Policy Research Institute (IFPRI)